Acute promyelocytic leukemia is a clonal expansion of hematopoietic precursors blocked at the promyelocytic stage. The differentiation block can be reversed by retinoic acid, which induces blast maturation both in vitro and in vivo. Acute promyelocytic leukemia is characterized by a 15;17 chromosome translocation with breakpoints within the retinoic acid alpha receptor (RAR alpha) gene on 17 and the PML gene, which encodes a putative transcription factor, on 15. A PML-RAR alpha fusion protein is formed as a consequence of the translocation. We expressed the PML-RAR alpha protein in U937 myeloid precursor cells and showed that they lost the capacity to differentiate under the action of different stimuli (vitamin D3 and transforming growth factor beta 1), acquired enhanced sensitivity to retinoic acid, and exhibited a higher growth rate consequent to diminished apoptotic cell death. These results provide evidence of biological activity of PML-RAR alpha and recapitulate critical features of the promyelocytic leukemia phenotype.